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4 Reasons to Add WEC Energy (WEC) to Your Portfolio
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WEC Energy Group Inc.’s (WEC - Free Report) ongoing investments in infrastructure projects, a focus on clean energy, the development of LNG facilities and an increase in the customer base will continue to boost the financial performance and make a strong case for investments in the utility space.
Let’s focus on the factors, which make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment.
Growth Projection& Surprise History
The Zacks Consensus Estimate for 2022 earnings has moved up by 0.2% in the past 60 days to $4.29 per share.
The Zacks Consensus Estimate for 2023 earnings has moved up by 0.2% in the past 60 days to $4.58 per share.
WEC Energy delivered an average earnings surprise of 9.1% in the last four quarters.
WEC Energy’s long-term (three to five years) earnings growth is projected at 6%.
Dividend
WEC Energy has a long history of dividend payment and has paid dividends to shareholders consecutively since 1988. WEC Energy aims at increasing the dividend rate annually in the range of 6-7%, subject to the approval of the Board of Directors. WEC has been raising annual dividends consecutively since 2010. The new dividend for 2022 is $2.91 per share, which represents a 7.4% increase from 2021.
Currently, WEC Energy has a dividend yield of 3.1% compared with the Zacks S&P 500 composite's average of 1.4%.
Stable Investments &Emissions Reduction
WEC Energy is investing in a cost-effective zero-carbon generation like solar and wind. In the 2022-2026 period, WEC projects capital expenditure of $17.7 billion and plans to invest $5.4 billion in renewable assets to expand the clean power-generation portfolio. WEC Energy plans to invest $3.4 billion in the electric delivery business in the 2022-2026 period to make it more resilient. Systematic investments in infrastructure projects will help the company to cater to the rising demand from the expanding customer base.
WEC Energy is also focused on replacing older-generation facilities with zero-carbon-emitting renewable and natural gas-based generation by 2025. WEC has updated plans and aims at reducing carbon emissions by 60% by 2025 and 80% by 2030, both from the 2005 baseline. Further, WEC Energy expects to trim methane emissions by 100% from 2011 levels by 2030. The company has retired 1,800 megawatts (MW) of coal-fired plants since 2018 and aims at removing another 1,600 MW of fossil-fueled generation by 2025. In addition to these near-term coal retirement plans, WEC Energy aims to cease the use of coal as an energy source by 2035.
Return on Equity
Return on Equity (ROE) indicates how efficiently a company is utilizing shareholders’ funds in the business to generate returns. At present, WEC’s ROE is 11.8%, higher than the industry average of 9.2%, which indicates that the company is utilizing its funds more effectively than its industry peers.
Price Performance
In the past year, WEC Energy has rallied 9.4% compared with the industry’s 9.2% growth.
The long-term earnings growth of Entergy, NiSource and Xcel Energy is projected at 1%, 7.2% and 6.4%, respectively.
The Zacks Consensus Estimate for 2022 earnings per share of Entergy, NiSource and Xcel Energy has moved up 5.2%, 5.1% and 7.4% year over year, respectively.
In the past three months, ETR, NI and XEL’s shares have surged 4.2%, 15.5% and 6%, respectively.
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4 Reasons to Add WEC Energy (WEC) to Your Portfolio
WEC Energy Group Inc.’s (WEC - Free Report) ongoing investments in infrastructure projects, a focus on clean energy, the development of LNG facilities and an increase in the customer base will continue to boost the financial performance and make a strong case for investments in the utility space.
Let’s focus on the factors, which make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment.
Growth Projection& Surprise History
The Zacks Consensus Estimate for 2022 earnings has moved up by 0.2% in the past 60 days to $4.29 per share.
The Zacks Consensus Estimate for 2023 earnings has moved up by 0.2% in the past 60 days to $4.58 per share.
WEC Energy delivered an average earnings surprise of 9.1% in the last four quarters.
WEC Energy’s long-term (three to five years) earnings growth is projected at 6%.
Dividend
WEC Energy has a long history of dividend payment and has paid dividends to shareholders consecutively since 1988. WEC Energy aims at increasing the dividend rate annually in the range of 6-7%, subject to the approval of the Board of Directors. WEC has been raising annual dividends consecutively since 2010. The new dividend for 2022 is $2.91 per share, which represents a 7.4% increase from 2021.
Currently, WEC Energy has a dividend yield of 3.1% compared with the Zacks S&P 500 composite's average of 1.4%.
Stable Investments &Emissions Reduction
WEC Energy is investing in a cost-effective zero-carbon generation like solar and wind. In the 2022-2026 period, WEC projects capital expenditure of $17.7 billion and plans to invest $5.4 billion in renewable assets to expand the clean power-generation portfolio. WEC Energy plans to invest $3.4 billion in the electric delivery business in the 2022-2026 period to make it more resilient. Systematic investments in infrastructure projects will help the company to cater to the rising demand from the expanding customer base.
WEC Energy is also focused on replacing older-generation facilities with zero-carbon-emitting renewable and natural gas-based generation by 2025. WEC has updated plans and aims at reducing carbon emissions by 60% by 2025 and 80% by 2030, both from the 2005 baseline. Further, WEC Energy expects to trim methane emissions by 100% from 2011 levels by 2030. The company has retired 1,800 megawatts (MW) of coal-fired plants since 2018 and aims at removing another 1,600 MW of fossil-fueled generation by 2025. In addition to these near-term coal retirement plans, WEC Energy aims to cease the use of coal as an energy source by 2035.
Return on Equity
Return on Equity (ROE) indicates how efficiently a company is utilizing shareholders’ funds in the business to generate returns. At present, WEC’s ROE is 11.8%, higher than the industry average of 9.2%, which indicates that the company is utilizing its funds more effectively than its industry peers.
Price Performance
In the past year, WEC Energy has rallied 9.4% compared with the industry’s 9.2% growth.
Image Source: Zacks Investment Research
Other Stocks to Consider
Other similar-ranked stocks from the same industry include Entergy Corp. (ETR - Free Report) , NiSource Inc. (NI - Free Report) and Xcel Energy Inc. (XEL - Free Report) , each holding a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The long-term earnings growth of Entergy, NiSource and Xcel Energy is projected at 1%, 7.2% and 6.4%, respectively.
The Zacks Consensus Estimate for 2022 earnings per share of Entergy, NiSource and Xcel Energy has moved up 5.2%, 5.1% and 7.4% year over year, respectively.
In the past three months, ETR, NI and XEL’s shares have surged 4.2%, 15.5% and 6%, respectively.